The following trial balance has been extracted from the books of Baganza plc as at 30 September \(19 X 7\) :

Additional information 1 The stock at 30 September \(19 \times 7\) was valued at \(£ 3,600,000\).
2 Depreciation for the year to 30 September \(19 \times 7\) is to be charged on the historic cost of the fixed assets as follows:
Freehold property: 5 per cent Plant and machinery: 15 per cent 3 The basic rate of income tax is assumed to be 27 per cent.
4 The directors propose a final dividend of \(60 \mathrm{p}\) per share.
5 The company was incorporated in 19X0.
6 Corporation tax based on the profits for the year at a rate of 35 per cent is estimated to be \(£ 850,000\).
7 A transfer of \(£ 40,000\) is to be made to the deferred taxation account.
Required Insofar as the information permits, prepare Baganza plc's profit and loss account for the year to 30 September 19X7, and a balance sheet as at that date in accordance with the Companies Act 1985 and appropriate accounting standards.
However, formal notes to the accounts are not required, although detailed workings should be submitted with your answer, which should include your calculation of earnings per share.

Transcribed Image Text:

000 000 Administrative expenses Called up share capital (1,200,000 ordinary shares of 1 each) Cash at bank and in hand Deferred taxation (at 1 October 19X6) Distribution costs Dividends received (on 31 March 19X7) 400 1,200 60 Corporation tax (overpayment for the year to 30 September 19X6) 20 460 600 249 Extraordinary item (net of tax) Freehold property: at cost accumulated depreciation (at 1 October 19X6) 1,500 2,700 260 Interim dividend (paid on June 19X7) 36 Investments in United Kingdom companies 2,000 Plant and machinery: at cost 5,200 accumulated depreciation (at 1 October 19X6) Profit and loss account (at 1 October 19X6) Purchases 3,600 2,022 16,000 Research expenditure Stock (at 1 October 19X6) Tax on extraordinary item Trade creditors Trade debtors Turnover 75 2,300 360 2,900 2,700 19,500 32,071 32,071